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Even after two decades writing about the personal finance aspects of housing, Elizabeth Razzi finds there’s always more to talk about. Buying and selling, improving, insuring, squabbling with the homeowners association -- whatever the housing topic, let this be your virtual back fence.

Younger Home Buyers Will Be Less Wealthy

Children of Baby Boomers, aka Echo Boomers, Millennials or Gen Y, born between 1981 and 2000, will drive housing demand during the coming decade, 2010 through 2020. There will be 5.9 million more of them in the peak home-buying years of age 25 and 44 than there were when the Boomers moved through that phase of life, according to Harvard's Joint Center for Housing Studies. Its influential annual report, State of the Nation's Housing, was just released today.

The bad news: The Echo Boomers will probably have less money to spend on housing -- and other needs -- than their predecessors. "The depth of the downturn may, for the first time in at least 40 years, reduce the real median household incomes of each 10-year [age group] relative to its predecessor by 2010," says the report. That new decade happens to start in only seven little months.

Demand for homes is going to shift over the next 20 years thanks to the aging Boomers (not that I would have any firsthand knowledge of that) and their Echo Boomer progeny. We'll see lots of demand for starter homes and rentals, as well as for seniors' housing. As older folks sell their homes off to the young 'uns, "adjustments to the existing stock are likely, both through remodeling and pricing," say the folks at Harvard. If the Echo Boomers' wealth is going down, you can guess which way that pricing trend is going to go.

"The first wave of change will occur in the inner suburbs of large metropolitan areas where people now in their 70s and 80s are concentrated, then fan out to the outer suburbs as the baby boomers start to downsize," the report says.

That runs contrary to the predictions that the next generation will come into a job market where there are fewer workers and more demand for labor. As the bulk of baby boomers retire their places will be filled by fewer folks, driving wages up.

"Echo boomers, the children of the post-World War Two baby boomer generation, offer a massive source of support for housing, the study said. The generation is entering the peak home buying and renting ages of 25 to 44 and numbers over five million people more than did their parents' record-sized group in the 1970s."

Did the report mention the massive debt echo boomers took on to go to college? The average STATE school graduate is now graduating with $20,000 or so in debt. That's a house downpayment right there that cannot be saved up because it's going towards student debt.

So why in the heck are we expecting the kids to be able to afford to enter the housing market anytime soon?

Affordability is the key word and there is nothing affordable out there in any of the major cities (which have the jobs) unless you want to put your life for the next 30 years into serious debt.

The last 8-10 years was a facade...pure and simple. People thought they were 'wealthy' when all they had was credit on paper. True wealth is in your bank account or in assets. The majority of peoples wealth was in assets that were over-valued due to shady lending standards and no regulation.

Take into account salary reductions for most Americans and with many losing hours or going part time, the income levels are dropping in this nation for 90% of the population.

With interest % going to sky-rocket soon because of the policies of Washington and with the current over-priced housing market, you are going to see substantial corrections to 2000 price levels (when regulation and lending were still in line with reality).